Daily Mail

Contactles­s boom fuels 51% surge in tap-and-go fraud

- By Sara Smyth Personal Finance Correspond­ent

THE boom in contactles­s payments has fuelled a startling rise in fraud using lost or stolen cards.

Official figures have revealed that fraud on credit and debit cards has soared 51 per cent in the past year – with almost 1,000 cases recorded each day.

The rise coincides with the growth in spending on contactles­s cards, which allow shoppers to pay for up to £30 of goods without entering their security PIN.

Banks have encouraged customers to use these high-tech cards as a quick and easy way of paying for small amounts of shopping, but critics have warned that they allow fraudsters easy access to someone’s account. A total of £14million was stolen from contactles­s cards and devices in 2017 – up from £6.9million the previous year.

Experts said some of the increase in fraud may be down to opportunis­tic thieves – people who find a missing card and would not try to guess its four-digit PIN but can now use it for payments under £30 using contactles­s technology.

The total amount spent using the tap-and-go technology doubled from £25.2billion in 2016 to £52.4billion last year. Meanwhile, in the past two years, the number of fraud cases involving credit and debit cards has gone up by 565 a day to 959.

Figures from trade body UK Finance show that while the value of fraud losses has fallen, the number of individual cases has risen 51 per cent – from 231,164 cases in 2016 to 350,066 last year – suggesting there are more frauds for much smaller amounts, which are typical of contactles­s transactio­ns.

While banks have been cracking down on other types of fraud, experts say contactles­s card fraud has crept up.

Martyn James, from complaints firm Resolver, said: ‘ In the past, fraudsters had to work harder to scam our cards, whereas now, as long as they stay under the £ 30 transactio­n limit, they can help themselves to your money.

‘Banks have neglected to properly warn customers about the risk of contactles­s fraud. It’s a dream for a criminal who sees an opportunit­y for some fast cash.

‘ Shoppers have become more complacent and banks need to do more in turn to detect fraudulent behaviour on contactles­s cards.’

Contactles­s technology was first introduced in the UK in 2007. Banks and building societies issued cards which initially allowed up to £10 to be spent by tapping the card on a machine at the till. Transactio­ns could be processed without the four-digit PIN needed for other transactio­ns.

After a slow start, use of the cards took off in 2015 when the cap was increased to £30 and more shops brought in the payment technology. Since then, their popularity has soared. The number of transactio­ns using contactles­s shot up from one billion in 2015 to 5.6billion last year.

Almost a third of all card transactio­ns made last year were contactles­s. By 2026, more than half of all debit card transactio­ns are forecast to be contactles­s, according to the UK Cards Associatio­n, which promotes them as ‘fast, easy and secure’. Meanwhile, Barclays is trialling cash machines that allow customers to withdraw up to £100 by tapping it with their card.

The amount taken from stolen or lost cards fell by £3.8million from 2016 to 2017.

Last year criminals took £92.5million – 4 per cent less than the year before. This is the first time in five years that the overall value defrauded from these cards fell.

Overall, the value stolen has shot up by 40 per cent since 2012, when £55.4million was lost to this form of card fraud. Banks say the amount lost by contactles­s accounts for 2.5 per cent of overall card fraud

‘Fast, easy and secure’

losses. UK Finance describes the £14million value as ‘low’ and said it is equivalent to 2.7p in every £100 spent on contactles­s cards.

Despite their popularity, concerns about their security have long been raised.

Fears around the security of contactles­s technology were stoked when five of the UK’s biggest banks admitted that stolen cards can still be used after they have been cancelled by their owner.

The Financial Conduct Authority raised concerns over the ‘weakness in the system’ and proved that some fraudsters have carried on using the cards up to eight months after they had been reported stolen.

A UK Finance spokesman said: ‘Contactles­s fraud is low, with robust security features in place in every card. At the same time, customers are fully protected against card fraud and will never be left out of pocket, unlike if they lose cash.’

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